Czech bonds prolonged its negative trend on Friday, as core debt markets set negative atmosphere again. The 10-year yield added another 5 bps and it higher by 25 bps since the last meting of the CNB on February 23. Moreover Czech market underperformed German Bunds on Friday thus negative spread tightened. Strong GDP growth in Q4 released on Thursday negatively affected bonds. Strong fundamentals and weak koruna make any hopes for rate cut unrealistic.
Today industr ial output may not drive the market despite significant revision of previous data. The output was annually higher by 15.1 %. Thus negative trend may continue today.
(CSOB - Investment research)